Analysis of Three Emerging Trends in Limited Partner Operational Due Diligence

Abstract

This article analyzes three key trends that have emerged among investors performing operational due diligence (ODD) reviews on third-party fund managers. The first trend is an increase in the scope of ODD reviews. The second trend is an expansion of the depth of ODD reviews. The third trend is a movement toward integration of ODD and investigative due diligence processes.

TOPICS: Real assets/alternative investments/private equity, legal/regulatory/public policy

Key Findings

• • Operational due diligence continues to receive more resources and attention from both investors and fund managers.

• • Investors are increasingly integrating the operational due diligence and investigative due diligence processes.

• • Investors are increasingly performing more frequent and rigorous operational due diligence reviews as fund operations have increased in complexity.

TOPIC: Legal/regulatory/public policy